CH 13 Multiple Car Lease Question

[max2k10]

Hello All, I'm looking for advise, suggestions. I filed for chapter 13 last year and was confirmed in April. So 1 year already next month. This is for 60 months. I have 3 leases which were not included in the bk. I have my wife's car which is due in December of this year. I recently went to dealer and was told by finance manager that they will not lease me a new car until my bk is discharged. Is this true? Unfortunately that will not happen till 2017 so long way to go. He suggested I try to extend my lease for an additional year. Not sure how easy or possible that will be. Has anyone been able to do that?

I was planning on buying a used car. Would that mean my current payment of $348 monthly will then be applied to my bk?
I also have a lease which expires on October of this year and that's my daughters car which is currently under my name. Since my daughter will be purchasing a new car under her name, will the current $200 monthly payments for that lease will applied to my bk? My other lease is good till next year so I still have time to worry about that one.

I really appreciate your inputs and suggestions to my questions.

[despritfreya]

1. If the current lessor is not willing to enter into a new lease with you there is nothing you can do about that. You just need to find a lessor or finance company willing to work with you if you wish to replace the vehicle with one that you are going to finance. Remember,if you purchase another vehicle, depending upon your jurisdiction, you either need court approval or the Trustee's approval to enter into incur post petition secured debt.

2. If the lessor is willing to extend the current lease, such may be an option for you but you need to check into whether or not paying for something you will never own is worth it.

3. Since these leases were in existence before you filed and you DISCLOSED them on Schedule G and J, as well as listed them in your Plan based upon your intention to assume each, your Trustee should have been aware of them and should have inquired as to when payments cease. Assuming everyone was aware of the payments and when the payments end, the Order Confirming your Plan should have taken such into account. Did it? If the answer is "yes" then I assume you either have to automatically increase payments or file a new Schedule I and J and, if appropriate, increase payments.

Hopefully you have an attorney who can walk you through this issue.

Oh, and welcome to the Forum.

Des.

[max2k10]

Des,
Thanks for the reply. First of all, I'm in NJ. My car leases were definitely added an confirmed in my plan. From conversations I've had with my attorney, he states nothing for me to worry about. Since we would need to replace all vehicles at the time they each expire, I should not have a problem replacing them. The biggest issue I see is getting a dealer to give me a decent deal or be willing to finance a car for me. Of course, I will need to get approval from the trustee. I'm not planning on incurring any additional debt so I really hope that my new car payments won't be much more that what I pay now. My other concern is new inquiries from the trustee into our current income since I have received a promotion since I first filed my case. Unfortunately, I'm barely making ends meet so I would hate to have pay anything additional to my plan.

[159515951]

If you're taking any loans, you're incurring additional debt, and the interest rates will be very high. Consider beaters until you're out of this...that's what I did, and it's liberating not to owe on a car.

[max2k10]

I am considering a used car. What I'm not sure about is what type of inquiries it will open if I purchase a car cash for $5000 or so. And then, since I will no longer have a car payment, I remember the trustee saying that our payments will also go up at that time for those amounts. My attorney has always told me that as long as we need a car for transportation and the cars will need to be replaced, we will be able to continue to justifying car payments in our plan. I would rather drive a car that won't break down then to buy a beater and than having a headache needing to fix it. This is the reason why I started to lease in the first place. If I knew I could pocket and save the car payments for myself is one thing, but giving it back to the trustee, I would hate to do this. I'm still not sure what to do or how this will all work out for me. I really don't know what to expect.

Has anyone gotten a car company to lease them a car without being discharged from their BK? Or even financed in NJ. The finance manager at the dealer I purchased my car believes I won't be approved for anything for now. I used to have a 785 FICO and it's now 553. That hurts. It was so easy back in the days. Then again, that's what got me in the situation I'm in today.

[ccmisery]

Your FICO is too low to get a good rate, but if you shop around you may be lucky, I have a 530 and got financing with Ford Credit for 9.99% but I did put down a big chunk of cash, if I waited till after discharge my APR would have been double if I could even get financing or approved, it also helped me that I have a current lease with Ford Credit that is in good standing.

I am filing 7 or 13 in the next month or so, still unsure on which one it will be? I was told in order to replace my wife's leased car that is due to be returned in another year, that this request would have to be put into the bankruptcy prior. If we can't get a replacement, the money I save in payments will be saved to put towards a sub $5K used car.

[max2k10]

Well, another trip to another dealer and still the same results. So far, I have spoken to the Finance managers at Nissan, Honda and Toyota and they all said the same thing. They will not even submit my finance application for a used, new, leased car as I will not be approved. The same thing from all. No deal until I'm discharged. I know I still have 7 months left on my wife's lease but now I'm worried. Anyone in New Jersey get a car from a dealer before discharge? Can anyone recommend a dealer for me.

[dmc-2008]

I wish your lawyer could have forwarned you, i would be upset! So now do you just turn it in and walk away with no car? What if u are over in mileage, dont you have to pay for that as well?

[max2k10]

I wish I would have financed my cars and not leased. Now I'm screwed and have no idea what's going to happen at the end. I was really worried about the trustee but now I have bigger issues getting a dealer to work with me.

[dmc-2008]

You have until December? Check into your idea about extending, someone here has been in this situation, they will help! Good luck!

[max2k10]

I do have to December but can't wait till last minute. I'm glad I started now. I had no idea I was going to have issues getting financed. I figured at a higher rate but I don't even have that option. I called my leasing company today (nissan) and will not extend my lease. Actually the person I spoke to mentioned I can get rid of my lease at any time and not be held responsible. I'm also not responsible for Over mileage or any damages. I'm actually 9k miles under so mileage is no issue.

[ccmisery]

It sucks I know, I have received letters from multiple banks telling me why I was not approved for a loan, the Ford dealer I got my car from ran several banks and all denied me except Ford Credit. I saw my Fico ranged from 514 up to 530 depending on what agency they used, Ford Credit pulled me at 530, maybe why I just made it?

If I knew what I know now, I would financed a car a year ago when my score was close to 700, but I didn't because I was out of a job and my wife was in the same boat.

Did you try putting your wife on as a co-signer? If she wasn't a joint filer, her score might get you bumped up a little to be approved for something.

Last thing would be to dump the leased car that ends the soonest, let them repo it and take the payments and save the money and pay cash for a beater. You might be able to get something in the $2K range from a private owner. My plan was if I could not get a loan, was to buy an older car in the $5K range with cash from my Tax return.

[max2k10]

Unfortanely my wife was a joint filer. I have never had the need to include my wife as a co signer on any of my cars. My credit score was always in highs 775. In regards to dumping the first lease which expires at the end of November makes no sense. I need a car to get to work so will need to buy a beater like you suggested first.

[max2k10]

I'm planning on asking my attorney if I can borrow from my 401k to buy a used car for let's say $10k. That should get me something decent and I will pay myself the interest. Does anyone know if this is possible? Will the trustee allow this? Has anyone here borrowed from their 401k to purchase anything during their bk.

[159515951]

You have time to sort this out. I recommend doing nothing for a month...just let everything sink in for a few weeks to make sure you're making a rational decision. IMO, it's a very bad idea to borrow from your 401k, even if the Trustee allows it.